2006 federal income tax - Education Deductions?

Question

I started my master's degree program in Apr 2006. I am paying for all books and tuition out of my own pocket. Can I take a deduction for the amount that I spent in 2006?

Answer 1

See section 6. Tuition and Fees Deduction on the link below

Answer 2

Yes/No. You can only deduct the cost of tuition from an accreditted school, college or university. Text books and supplies are not to be used as a deduction. But, after you finish school if you are self employed or working on a contractual basis and reporting income, some of those goods can be deducted if purchased in the same year that you started doing that work.

Example, say you become a CPA after your schooling is completed in June. To finish school you purchased a new laptop in January. By, July you are up and running and providing your services and earning income you will report. If you are using that computer in the second half of the year and it essential for you to operate your business it is eligible for a deduction. The same can go for calculators, software, adding machines, office supplies are anything else you purchased for school, but now are using - IN THE SAME CALENDAR YEAR- to run your business or contract work.

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Answer 3

You can deduct upto $4000 of the amount you spent on education.
Or you can take the Lifetime Learning Credit - this provides the greater tax benefit for most people.

Answer 4

You could claim the lifetime learning credit for your education expenses.